MIRA INFORM REPORT

Report Date :

10.10.2014

IDENTIFICATION DETAILS

Name :	FRESH AND HONEST CAFÉ LIMITED
Registered Office :	4^th Floor, Tower - 2, TVH Beliciaa Towers, Block No.94, MRC Nagar Main Road, MRC Nagar, Chennai – 600028, Tamilnadu
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	02.05.1997
Com. Reg. No.:	18-038099
Capital Investment / Paid-up Capital :	Rs. 68.637 Millions
CIN No.: [Company Identification No.]	U55101TN1997FLC038099
PAN No.: [Permanent Account No.]	AAACF1516H
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Trader of Machines and Manufacturer of Coffee Powder.
No. of Employees :	350 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (33)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 7800000
Status :	Moderate
Payment Behaviour :	Sloe but Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. Rating reflects moderate financial risk profile due to loss incurred by the company. However, Trade relations are fair. Business is active. Payment terms are slow but correct. The company can be considered for business dealings with some caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

N E W S

Verdict Implications : Apex court order may alter coal import dynamics. Traders go slow on talks over coal supply contracts, uncertainty over cancellation of blocks weigh on stocks.

Recent arrest of the Chennai head of the Registrar of Companies, the ministry of corporate affairs arm that ensures that companies file all the information required by the Companies Act is the latest manifestation of a messy fight between a father and his adopted son for the control of Rs 40000 mn business empire. The Central Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10 lakhs as bribe from M A M Ramaswamy, a CBI official said.

Central Bureau of Investigation books Electrotherm for cheating Central Bank of Rs 4360 mn.

Infosys maintains revenue guidance. COO Rao says attrition still an area of concern and it would take a few more quarters to bring down levels to 13-15 %.

DHL  to invest Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its e-commerce business model for the Asia-Pacific region.

Blackstone may buy stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.

Kingfisher Airlines Ltd grounded in October 2012 under the weight of heavy debt and accumulated losses, recently approached the Delhi high court for relief in two separate cases. The airline challenged a notice by Punjab & National Bank alleging that It had wilfully defaulted on Rs 7700 mn of loans and sought more time to comply with the requirements under the listing agreements with the Stock Exchanges.

OnMobile likely to sack another 300 employees. The lay-offs follow a spate of senior-level exits over the past two years, starting with of its founder. The overall lay-offs could number around 600 and are driven by the need to cut costs, says a former employee.

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

INFORMATION PARTED BY

Name :	Mr. Vijin
Designation :	Assistant Manager
Contact No.:	91-9962586666
Date :	08.10.2014

LOCATIONS

Registered Office :	4^th Floor, Tower - 2, TVH Beliciaa Towers, Block No.94, MRC Nagar Main Road, MRC Nagar, Chennai – 600028, Tamilnadu, India
Tel. No.:	91-44-24622595
Mobile No.:	91-9962586666 (Mr. Vijin)
Fax No.:	91-44-24622596
E-Mail :	info@lavazza.co.in
Website :	www.fresh-honest.com
Factory :	300 West, Road C Sri City, DTZ Chittar – 517588, Andhra Pradesh, India

DIRECTORS

As on 26.09.2012

Name :

Mr. Shivashankar Ramchandran

Designation :

Whole Time Director

Address :

Old No 92, New No 78, 5^th Street, Padmanavanagar, Adyar, Chennai – 600020, Tamilnadu, India

Date of Birth/Age :

14.05.1965

Pan No.:

AQKPS5969G

Date of Appointment :

26.09.2011

DIN No.:

00028237

Other Directorship :

S.NO.	CIN/LLPIN	NAME OF THE COMPANY/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U55101TN1997FLC038099	FRESH AND HONEST CAFE LIMITED	Whole-time director	26/09/2012	11/01/2006	12/02/2013	Active	NO
2	U74999MH1966NPL013602	THE INDO-ITALIAN CHAMBER OF COMMERCE AND INDUSTRY	Director	03/09/2010	03/09/2010	16/03/2013	Active	NO
3	U15492DL1999PLC101732	BARISTA COFFEE COMPANY LIMITED	Director	29/09/2011	22/06/2011	12/02/2013	Active	NO

Name :

Mr. Enrico Meraldi Strada

Designation :

Director

Address :

Strada Sant Antonio Gassino Torinese, Italy – 10100

Date of Birth/Age :

09.08.1956

Date of Appointment :

30.09.2011

DIN No.:

02272871

Name :

Mr. Giampaolo Arpe

Designation :

Director

Address :

Via Lipari, Milano 4-20144, Italy

Date of Birth/Age :

17.11.1961

Date of Appointment :

08.05.2012

DIN No.:

05314979

Other Directorship :

S.NO.	CIN/LLPIN	NAME OF THE COMPANY/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U55101TN1997FLC038099	FRESH AND HONEST CAFE LIMITED	Director	26/09/2012	08/05/2012	23/04/2014	Active	NO
2	U15492DL1999PLC101732	BARISTA COFFEE COMPANY LIMITED	Director	29/09/2012	12/06/2012	23/04/2014	Active	NO

Name :

Mr. Shivkumar Krishnamurthy

Designation :

Whole Time Director

Address :

Peace Sandosa, 197 Ramasamy Salai, KK Nagar, Chennai – 600078, Tamilnadu, India

Date of Birth/Age :

27.02.1966

Date of Appointment :

14.06.2012

DIN No.:

05301364

KEY EXECUTIVES

Name :	Mr. Vijin
Designation :	Assistant Manager
Name :	Mr. Surendra Kumar Sahoo
Designation :	Company Secretary
Address :	Sahoo No 177, Choolaimedu High Road, Chennai – 600094, Tamilnadu, India
Date of Birth/Age :	16.05.1975
	AXNPS799L
Date of Appointment :	16.04.2007

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 26.09.2012

Names of Shareholders	No. of Shares
Lavazza Netherlands	5710084
Massimo Stopponi	1
Enrico Meraldi	1
Simona Musso	1
Marco Valle	1
Giampaolo Arpe	1
Daniele D’Amuri	1
Total	5710090

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Trader of Machines and Manufacturer of Coffee Powder.
Products :	· Coffee Makers · Coffee Vending Machines · Lavazza Coffee Machines · Espresso Capsule Coffee Makers · Lavazza Blue Coffee Capsules · Lavazza Blue Tea Capsules · Espresso Point Capsules · Bean to Cup System · Coffee Beans
Exports :
Products :	· Finished Goods
Countries :	· Sri Lanka · Nepal · Bangladesh
Imports :
Products :	· Coffee Beans · Machinery
Countries :	· Italy

GENERAL INFORMATION

No. of Employees :	350 (Approximately)
Bankers :	· Punjab National Bank, 17 Rajaji Salai, Chennai – 600001, Tamilnadu, India
Facilities :	--

Banking Relations :	---
Auditors :
Name :	M/s. Deloitte Haskins and Sells Chartered Accountant
Address :	ASV N Ramana Tower, 52, Venkatanarayana Road, T Nagar, Chennai – 600017, Tamil Nadu, India
PAN No.:	AACFD3771D
Holding Company :	· Lavazza Netherlands BV, Netherlands · Barista Coffee Company Limited
Ultimate Holding Company :	· Luigi Lavazza Spa, Italy

CAPITAL STRUCTURE

As on 26.09.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs. 100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5710090	Equity Shares	Rs.10/- each	Rs. 57.100 Millions

As on 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs. 10/- each	Rs. 100.00 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6717546	Equity Shares	Rs. 10/- each	Rs. 67.175 Millions

FINANCIAL DATA

[all figures are in Rupees Millions

.

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	67.175	57.101	98.680
(b) Reserves & Surplus	1891.522	1648.727	1037.116
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1958.697	1705.828	1135.796
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	60.706	17.171	24.132
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	6.362	6.083	5.096
Total Non-current Liabilities (3)	67.068	23.254	29.228
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	94.516	96.094	98.858
(c) Other current liabilities	122.598	505.004	38.495
(d) Short-term provisions	2.012	5.368	3.229
Total Current Liabilities (4)	219.126	606.466	140.582
TOTAL	2244.891	2335.548	1305.606
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1419.641	360.225	389.886
(ii) Intangible Assets	13.794	5.028	8.489
(iii) Capital work-in-progress	0.000	0.000	41.050
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	51.918	437.221	98.148
(e) Other Non-current assets	194.434	753.998	0.000
Total Non-Current Assets	1679.787	1556.472	537.573
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	120.654	122.405	113.576
(c) Trade receivables	168.648	165.661	129.672
(d) Cash and cash equivalents	183.580	409.077	470.490
(e) Short-term loans and advances	87.740	73.586	42.426
(f) Other current assets	4.482	8.347	11.869
Total Current Assets	565.104	779.076	768.033
TOTAL	2244.891	2335.548	1305.606

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	1284.137	1206.871	1034.624
		Other Income	30.037	27.491	29.694
		TOTAL	1314.174	1234.362	1064.318
Less	EXPENSES
		Cost of Material Consumed	428.973	416.836	328.096
		Purchase of Stock-in-Trade	239.152	237.237	182.612
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	8.225	(26.468)	(13.391)
		Employees benefit expenses	156.162	146.881	132.809
		Other Expenses	407.959	397.389	369.986
		TOTAL	1240.471	1171.875	1000.112
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		73.703	62.487	64.206
Less	FINANCIAL EXPENSES		0.000	0.134	1.075
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		73.703	62.353	63.131
Less/ Add	DEPRECIATION/ AMORTISATION		117.913	60.119	70.549
	PROFIT/ (LOSS) BEFORE TAX		(44.210)	2.234	(7.418)
Less	TAX		47.470	0.000	0.000
	PROFIT/ (LOSS) AFTER TAX		(91.680)	2.234	(7.418)
	Earnings Per Share (Rs.)		(16.06)	0.39	(1.30)

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(6.98)	0.00	(0.70)
Net Profit Margin (PBT/Sales)	(%)	(3.44)	0.19	(0.72)
Return on Total Assets (PBT/Total Assets}	(%)	(1.97’)	0.10	(0.59)
Return on Investment (ROI) (PBT/Networth)		(0.02)	0.13	(0.01)
Debt Equity Ratio (Total Liability/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		2.58	1.28	5.46

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	98.680	57.101	67.175
Reserves & Surplus	1037.116	1648.727	1891.522
Net worth	1135.796	1705.828	1958.697
long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	1034.624	1206.871	1284.137
		16.648	6.402

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	1034.624	1206.871	1284.137
Profit	(7.418)	0.035	(91.680)
	(0.72)%	0.00%	(7.14)%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	----------------------
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	Yes
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	Yes
24]	Banking facility details	No
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

INDEX OF CHARGES: NO CHARGES EXIST FOR THE COMPANY

OPERATIONS

The company has achieved Net Turnover of Rs. 1285.287 Millions against Rs. 1208.198 Millions over the previous year. Operating Profit for the period has been Rs 74.112 Millions as compared to the previous year figure of Rs 62.487 Millions. The overall performance of your company for the period under review has resulted a net loss of Rs. 91.692 Millions compared to the profit of Rs. 0.035 Millions registered during the last year. During the year there is an increase in depreciation by Rs 0.578 Millions largely due to commissioning of Sri City in Tada, AP in the month of Dec 2012 and besides this there has been an increase in Tax Liability with resultant increase in current & deferred Tax expense which has reduced the profitability of the company as compared to Last Year.

FIXED ASSETS

· Land and Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office Equipment

· Computer Equipments

· Leasehold Improvements

· Other Equipments

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.03
UK Pound	1	Rs.98.63
Euro	1	Rs.77.74

INFORMATION DETAILS

Information Gathered by :	DIP
Analysis Done by :	SUM
Report Prepared by :	KLS

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	NO
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		33

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.